At the beginning of April, amendments to the Investment Promotion Act (‘IPA’) were adopted at first reading, aimed at improving the efficiency of investment promotion measures, as well as simplifying and achieving maximum transparency regarding the requirements for investment projects.
The amendments provide for a substantial reduction of the time limits for provision of administrative services to investors. At present, after the submission of an investment class certificate, the central and territorial executive authorities provide administrative services to investors within one third shorter timeframes than those provided for in the relevant legislation. The amendments foresee that these deadlines will be reduced to one half, which should lead to an even higher priority and speed in the work of the administration with regard to certified investors.
A 14-day period is envisaged within which the Executive Director of the Bulgarian Investment Agency (‘BIA’), respectively the mayor of the municipality, should notify the investor of any discrepancies and/or incompleteness of the submitted application and respective documents for the initial issuance of an investor class certificate. Until now, the regulations did not provide for a specific time limit within which such instructions were to be provided. The amendment shall bring clarity to the process and creates additional certainty and expediency at procedural level.
In order to ensure that investors are served within the shortened deadlines, BIA will be obliged to coordinate directly with the authorities and legal entities in whose area the measures and activities related to the investment project fall, by appointing at least one official in all administrations as a ‘coordinator’ to provide the BIA with the necessary information.
A significant innovation is envisaged in connection with the reduction of the requirement for a minimum self-participation of the investor with own or other attracted capital in the project for which the issuance of an investor class is applied for. The 40% threshold has been reduced to 25%, which should make the procedure even more accessible to potential applicants.
The possibility of providing grants for priority investment projects in the field of manufacturing industry, as well as in the field of education and research is laid down. In this regard, it is the duty of the Minister for Innovation and Growth to develop and adopt a Methodology for the award of grants for priority investment projects in the manufacturing industry.
The possibility to apply incentive measures also in the case of a common investment project between two or more legal entities is explicitly regulated, and not only in relation to subsidiaries, as is the current law.
A control mechanism over the mayors of municipalities when certifying municipal investment projects is also envisaged.
The proposed changes are key to implementing a more effective policy to encourage and attract investment. They aim to ensure that public resources are directed towards investment projects with a sustainable economic and social impact and stimulate regional development.
